RETAILERS could soon take over from High Street banks as our preferred financial service providers, as more people turn to them for credit cards, personal loans and current accounts.

According to comparison website when it comes to plastic, Marks & ­Spencer, Tesco and Sainsbury's are beating the Big Four of Royal Bank, Lloyds, Barclaycard and HSBC hands down on trust, value for money and customer care.

The major banks failed to win a single category in the site's annual credit card satisfaction survey of more than 7,000 cardholders.

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American Express was named best provider, coming top for rewards and second for customer and online service and value. The next best performers were M&S Bank, Nationwide Building Society and Tesco Bank.

M&S scooped the award for most trusted provider and was among the top three in four other categories, while Nationwide did best for customer and online service. Tesco Bank took the honours for customer satisfaction, value and most customer recommendations.

This week Sainsbury's launched two new cards designed to win it a larger share of this lucrative market. The Nectar Balance Transfer card offers 29 months interest free on existing balances - one of the longest deals available - for a 2.89 per cent fee plus six months free on purchases. The Nectar Low Balance Transfer Fee card offers 12 months free on transfers - with a market-leading fee of 0.5 per cent - and the same on purchases.

Both cards give double Nectar points on Sainsbury's shopping, additional points for buying its fuel and one point for every £5 spent elsewhere.

Meanwhile, Tesco has a transfer card offering 30 months free for a 2.9 per cent fee and no interest on purchases for three months. It gives points on Tesco shopping and fuel and on purchases made elsewhere. All three cards have a long-term rate of 18.9 per cent .

Jafar Hassan, personal finance expert at, said: "It's great to see retailers redefining credit cards to meet the needs of today's savvy shoppers.

"While some consumers have a card purely as a means of providing credit, there are other cards designed for everyday spending which offer great rewards and cashback to loyal customers.

"Combined with top-notch customer service and great value for money, it's not surprising that retail brands are hitting a home run."

Tesco and Sainsbury's both offer personal loans from 5.7 per cent interest, and M&S lends from 6.1 per cent , putting the trio among the market leaders there too.

And retailers are making inroads into current account provision. M&S was the first to enter the fray, with its £10-a-month Premium packaged account offering loyalty points, vouchers and a £50 M&S gift card. It has an automatic £500 overdraft, the first £100 of which is interest-free, with the rest charged at 15.9 per cent . And, for an additional £7.50 a month, customers get worldwide multi-trip family travel insurance.

This month, M&S followed up with a fee-free version of the account giving loyalty points worth 1 per cent of spending and a £100 gift card.

Unlike many other accounts, which have a monthly funding requirement of £500 to £1,000, M&S has no minimum.

The free account has the same overdraft terms as the paid-for version, and customers receive text alerts when they approach their borrowing limit.

M&S says the lack of fees means using an overdraft of £600 for one week every month would cost £18, compared to an average of £56 from other providers.

Sue Fox, the bank's chief ­executive, said: "The new current account combines a transparent account structure, debit card reward points and the great customer service you'd expect from M&S."

Kevin Mountford, head of banking at, commented: "We have seen competition in the current account market dramatically increase following the launch of the seven-day switching service last year, and this product is an attractive new entrant to the market.

"As always, however, before signing up, customers must think about how they use their current account and make sure this one is suitable for their requirements."

Unlike several of its rivals, M&S doesn't pay in-credit interest. Those looking to earn money on their cash might, therefore, be better off with Santander's 123 account, which pays up to 3 per cent on balances up to £20,000.

In exchange, there is a £2 monthly fee, a funding requirement of at least £500 and a minimum balance of £1,000 is needed to receive interest.

Alternatively, Halifax's Reward account, which has a monthly requirement of £750 and two direct debits, pays £5 a month after tax to those who stay in credit, and there is £100 cashback for new customers.

Meanwhile, Tesco Bank is inviting potential customers to register for its forthcoming account with the promise of reward points and "no frills or gimmicks. Just good, honest value".

Bank chief executive Benny Higgins threw down the gauntlet to rivals when he claimed: "This is about offering the best service to our customers. Everything at Tesco is done with our customers in mind. Our current account will be no exception."